In the three months ending September 30, 2004, the Farmington Hills, Michigan-based company grew its pre-charge net profit 59% to $6.5 million on revenue that increased 2% to $96.2 million.
During the quarter, Covansys took a $28.7 million charge relating to the recapitalization of the ownership interest held by a fund managed by Clayton, Dublier & Rice. If this charge is included, the net loss for the quarter was $23.1 million.
Covansys has had to restate revenue for earlier quarters after uncovering financial irregularities, and has also this year had to contend with the resignation of ex-CFO Michael Duffy as well as former CEO Martin Clague.
Raj Vattikuti, Covansys founder, president and CEO, said the company’s alliances with Fidelity Information Systems and PeopleSoft have had a positive impact on its billable headcount at its development centers in India.
Covansys’ onshore utilization rate was 85.2% in the third quarter, up from 83% in the year-ago period, but utilization rates at its offshore operation in India fell to 76.2% from 82.3% in the third quarter of 2003.
Vattikuti said the company’s priorities are to increase its offshore headcount, and expand its capabilities in legacy modernization and financial services.
